The powers of an LPA attorney – more limited than one might expect

In England and Wales, lasting powers of attorney (LPAs) can be an effective solution, enabling such an individual (A) to nominate someone they trust (B) to act on their behalf if they lose mental capacity and become unable to make decisions for themselves. Confusingly to the average layperson, A is known as the donor and B as the attorney.

There are two types of LPAs, each with a standard form supplied by the Office of the Public Guardian which gives limited room for creativity but a comforting level of standardisation: one covering decisions about the donor’s property and financial affairs, and one dealing with decisions about the donor’s health and welfare. Donors often choose to include specific guidance in their LPAs, setting out preferences, instructions or restrictions in relation to the exercise of the attorney’s powers.

However, irrespective of any restrictions imposed by the donor in the LPA itself, the law also imposes strict rules governing an attorney’s powers and duties when acting as such. In particular, section 12 of the Mental Capacity Act 2005 (MCA 2005) provides that attorneys can make gifts only in limited circumstances – broadly on customary occasions (for example, birthdays or Christmas) or by way of charitable donations which the donor might otherwise have been expected to make. In both cases, the value of the gift must not be “unreasonable having regard to all the circumstances and, in particular, the size of the donor’s estate”.

Gifts not falling within these criteria can only be made with permission of the Court of Protection. The recent case of Chandler v Lombardi [2022] EWHC 22 (Ch) serves as an important reminder of these limits on attorneys when acting under an LPA.

In 2016, Janet Lombardi was registered with the Office of the Public Guardian as attorney for her mother, Concetta Chandler, in respect of both types of LPA. Between 2016 and 2018, Concetta’s mental health deteriorated and, on 4 June 2018, acting under the financial affairs LPA, Janet transferred title to Concetta’s home into the joint names of herself and Concetta, for nil consideration, with the transfer being registered at the Land Registry. Concetta’s son challenged the transfer, seeking a declaration that the transfer of the property was void and that the Land Registry entry for the property required rectification.

The High Court confirmed that, as the transfer of the property was a gift and did not fall within the exceptions set out in section 12 MCA 2005, Janet did not have the power to make the transfer and the transaction was rendered void. Although Janet was ignorant as to the need to seek authorisation from the Court of Protection in relation to the gift, this ignorance was treated as showing a lack of care, given the nature of the gift and the impact it had on Concetta’s affairs, particularly in light of the clear duties of an attorney set out in the MCA 2005.

The case serves as a cautionary tale for all attorneys acting under an LPA, reminding them that there are limits to their powers, and that they must inform themselves of their duties. Attorneys should not be in doubt about this since the forms themselves incorporate a number of warnings and links to the law and to guidance and Codes of Practice. However, if in doubt, an attorney should seek legal advice as to whether a proposed course of action is in line with their duties and obligations under the MCA 2005.